Paper checks for consumers will likely be eliminated in the next 15 years, said American Bankers Association security expert Paul Benda last week during the ABA Washington Summit.
Benda, executive vice president of risk, fraud and security, predicted business checks will be around for 20-25 years. He sees checks as an “inherently insecure form of payment” that can be washed and counterfeited.
Nearly $700 million in check fraud was reported in 2024, up from $600 million the previous year, according to the Financial Crimes Enforcement Network. In 2023, the average daily volume of checks processed by the Fed was 12.6 million with a combined value of $33.8 billion.
According to the U.S. Postal Inspection Service, mail theft complaints soared 327 percent from 2018-23. In 2018, there were 59,775 complaints. In 2023, that number was 255,183. Mail theft arrests reportedly dropped 44 percent during that same time period.
Benda said the banking industry could consider whether checks need to look like they currently do, or whether QR codes could be inserted. Other check-related topics Benda discussed included whether checks should be printed on special paper at a bank; and if the name of checking accounts should be changed to deposit accounts.
Benda’s presentation came as the Treasury Department prepares to stop issuing paper checks by the end of September. The Trump administration cited “unnecessary costs; delays; and risks of fraud, lost payments, theft and inefficiencies.”
Benda’s overview on paper checks came as part of his broader discussion on fraud, which he called an international issue and part of a “criminal-industrial complex.” Fraud losses increased 25 percent last year to $12.5 billion, according to the Federal Trade Commission.
Benda is concerned that AI-generated deepfakes could become more accessible. One possibility is that criminals capture children’s voices, which would make it easier for them to scam their grandparents.
Australia has focused on preventing scams and developed partnerships with telecom companies, Benda noted. The country is proactively working to stop SMS spoofing, which involves changing the short message service to have a fake sender ID.
Benda compared Australia’s anti-fraud approach favorably with a previous UK voluntary anti-fraud system that held payment service providers liable for completely reimbursing customers who fell victim to fraud. He noted the UK has seen a 13 percent increase in fraud claims since it was implemented last year, compared with a decline in Australia.
Benda spoke highly of a UK program in which potentially fraudulent transactions — a customer being on the line with an international number on a longer phone call, trying to add a new payee — can be put on hold.